Bosnia and Herzegovina is a country where more people die than are being born, where unemployment, especially among the youth, is rampant, where economic reforms progress slowly and which is used as a transit point for illicit drugs, the US Central Intelligence Agency (CIA) says in their World Factbook.
Bosnia is “increasingly a transit point for heroin being trafficked to Western Europe” and a “minor transit point for marijuana”, the CIA says, adding that the country “remains highly vulnerable to money-laundering activity given a primarily cash-based and unregulated economy, weak law enforcement, and instances of corruption.”
The CIA data includes information from the 2013 census in Bosnia, but also states that the results of this census are rejected by authorities in Republika Srpska (RS), the Serb-dominated semi-autonomous entity in the country.
The CIA describes Bosnia’s economy as “among the least competitive” in the region, with foreign banks, mostly from Austria and Italy, controlling much of the banking sector, although the largest bank is a private domestic one.
The economy of the country is mainly based on exports of metals, energy, textile and furniture, as well as international aid and remittances, the data says.
“A highly decentralized government hampers economic policy coordination and reform, while excessive bureaucracy and a segmented market discourage foreign investment,” the CIA says, adding that in 2016 the country began a three-year IMF loan program but has struggled to meet the economic reforms necessary for receiving all the funding installments.
Bosnia’s private sector is growing slowly, and foreign investment has sharply dropped in 2007 without improving since then, the CIA says.
The high unemployment in the country “remains the most serious macroeconomic problem,” the Agency says.
The successful 2006 implementation of a value-added tax in provided a steady source of revenue for Bosnia’s government and helped decrease gray-market activity, but “public perceptions of government corruption and misuse of taxpayer money has encouraged a large informal economy to persist,” the data says.
Bosnia’s economic priorities are also listed: “acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization membership; and securing economic growth by fostering a dynamic, competitive private sector.”
The 2017 official figure for unemployment is 20,5 per cent, but the CIA said that true unemployment is lower, as “many technically unemployed persons work in the gray economy.”
According to 2017 data, Bosnia mainly exports to Germany 14,7 per cent, Croatia 11,8 per cent, Italy 11,1 per cent, Serbia 10 per cent, Slovenia 9 per cent and Austria 8,3 per cent. Data on exports from the same year states that most was exported to Germany 14,7 per cent, Croatia 11,8 per cent, Italy 11,1 per cent, Serbia 10 per cent, Slovenia 9 per cent and Austria 8,3 per cent.
The CIA data says that Bosnia has a territorial dispute regarding sections along the Drina River with neighbouring Serbia, and that 99,000 people are internally displaced by inter-ethnic violence, human rights violations, and armed conflict since the 1992-95 war.
Regarding environmental issues, the country suffers from air pollution, deforestation and illegal logging, inadequate wastewater treatment and flood management facilities, limited sites for disposing of urban waste and leftover mines from the 1992-95 in certain areas, the CIA says.
